Despite “soft” spending trends from its small and midsize commercial customers, American Express saw a 4% year-over-year increase in travel and entertainment spending by its U.S. commercial customers in the first quarter.
American Express (Amex) reported a notable 4% increase in travel and entertainment (T&E) spending by its U.S. commercial customers, reaching a total of $28 billion in the first quarter. This growth trend, compared to $25 billion in Q1 2023 and $26 billion in Q24 2023, indicates a positive trajectory in T&E expenditures.
Despite the rise in T&E spending, overall U.S. commercial customer spending on goods and services was $99 billion, up by 1% year over year but down from $105 billion in the previous quarter. Amex’s large and global U.S. customers, constituting nearly a fifth of total commercial customer spending, reporter a 5% year-over-year increase in total spending, while small and midsize enterprises (SME) saw a 1% increase.
“The SME billed business has been in that 1% to 2% range for a year now,” Amex CFO Christophe Le Caillec said in a earnings call on Friday. “We think that this is macro-driven, and we have a ton of data that confirms that it’s not specific to American Express, and the rest of the industry is experiencing similar trends.”
American Express announced a substantial 14% year-over-year increase in travel and entertainment spending by its international customers, totaling $27 billion in the first quarter. This growth, attributed to both consumer and commercial customers, highlights the expanding international business for Amex.
Among international commercial customers, spending on T&E and goods and services rose by 11% year over year, comprising 35% of Amex’s total international business.
Amex’s Q1 financial results showed total revenue of $15.1 billion, reflecting an 11% year-over-year increase. The growth was driven by heightened card member spending and higher net interest income. The company’s net income for the quarter reached $2.4 billion, up from $1.8 billion in the first quarter of 2023.
